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Forbes magazine has selected Ireland as the best place in the world to do business and it certainly is for US business beyond the United States with the lowest taxes outside of tax havens with sandy beaches, fringed by arching palms. But it's surely strange that Irish business has had such limited success in this paradise over the past half century.

Through boom and bust, there can be little doubt that there is a market for fairytales in Ireland and overseas the distorting impact of the dominant foreign-owned sector on Irish data means that in both Europe and the US and presumably elsewhere, it's rare to find a commentator who has a knowledge of the economy based on the unvarnished facts.

As in the boom when many believed that Ireland had found a philosopher's stone that would transmute property transactions into a permanent prosperity, rare rankings today of Ireland as a miracle place are lapped up by official Ireland including the mainstream media.

Last year the European Commission selected Ireland among four top European countries for innovation; the top Irish R&D spenders are American companies that have headquarters in Ireland but do little if any research and development in Ireland -- most of these headquarter companies do not have business operations in Ireland and a small office staff enables such a company to slash its global tax bill.

Seagate Technology, a US company that spends about €1bn annually on R&D, is an 'Irish' company.

Much of the assumed high tech exports are fake. They are booked in Ireland for tax purposes.

The Irish Independent reports today that Facebook's staff in Ireland reaped a €11.84m share windfall in 2012, the same year the social networking giant floated on the Nasdaq stock exchange.

The share-based payments work out at an average windfall of slightly under €30,000 each for the 400 staff at the Dublin offices.

Revenues at Facebook Ireland surged 70% to €1.789bn in 2012, according to new accounts lodged with the Companies Office. The company's tax liability was just €1.9m, after it recorded a pre-tax loss of €626,000 for the year.

The latest figures show that Dublin-based Facebook Ireland accounted for 47.7% of the social networking giant's global revenues of $5.089bn (€3.75bn) in 2012. But, despite a €700m surge in revenues Facebook Ireland still did not manage to record a pre-tax profit, the accounts show.

These exports are a fantasy as are Google's diversion of 41% of its 2012 global revenues to Ireland for tax purposes.

Yes on low taxes: not only do US firms pay little in corporate taxes (an effective rate of 2.5%), employer social security taxes are among Europe's lowest -- pity about those workers in the indigenous sector who do not have any occupation pension.

The Irish government's claim of a 21% increase in competitiveness in 2008-2015 "through reduction in unit labour costs...against the Eurozone average" will be realised only because of a surge in virtual exports and output thanks to massive tax avoidance. In the real world, there has been no competitiveness miracle.

Forbes says: "The American Chamber of Commerce Ireland released a report in October that shows U.S. firms invested $129.5 billion in Ireland between 2008 and 2012. It represented a greater total than had been invested in the previous 58 years combined. Ireland was the fourth biggest recipient of US foreign direct investment last year and attracted almost as much US investment as all of developing Asia." Not true!

This fairytale comes at a cost and can it be surprising that despite a brutal recession, the Irish Government has implemented no significant reforms?

Richard Bruton, enterprise minister, is said to have commented from Indonesia where the European Commission is representing the EU28 in trade talks: "Today’s finding by Forbes that we are the best country in the world for business is above all a testament to the hard work and innovation of our businesses and workers. It is the latest in a range of indicators which shows that the environment for business here is steadily improving, and shows that the hard work and sacrifices of so many people are yielding tangible results in terms of international competitiveness and the jobs we so badly need.

“Government has a key role too in delivering improvements in the environment for business. Before the election we said that we would seek to make Ireland the best small country in the world for business and order to achieve this, we put in place the Action Plan for Jobs to drive change across the economy. Over the past two years every Department and dozens of Agencies have worked hard to deliver the reforms needed in competitiveness and improved supports for Irish and multinational businesses.

“Through continued implementation of the Action Plan this year and in future years, we in Government are determined to ensure that we sustain these improvements and cement our reputation as the best country in the world for business - - and crucially, build on this to create the jobs we need.”

Why would Bruton really worry about the lack of a credible jobs engine, when Forbes says: what's to worry about?

Barry O’Leary, head of IDA Ireland, the inward investment agency, at least gets to the value of the fairytale from his point of view: "This Forbes ranking will reach senior business people across the world, making them aware of all the advantages available to those that locate businesses here.

"Country rankings like this are used by companies across the world when they make initial decisions to investigate the possibility of locating their businesses internationally.

IDA Ireland intends to use the survey results as marketing material in key markets like the US and Europe."

How does this tally with the reality of the Irish economy?

Massive investment by US firms (cash held in Ireland to avoid paying taxes in the US, can be treated as a foreign direct investment inflow) but few jobs in recent years;

Irish full-time employment in the internationally tradeable goods and services sectors (foreign and indigenous) at the end of 2012 was at about 295,000 compared with 320,000 in 2000 despite headline exports growing at current prices by 71% in the period 2000-2012 and at constant prices by 59%;

Despite Irish SMEs (small &medium size firms) having very low corporate and employer social security taxes, they have a very poor exporting record;

Two-thirds of private sector workers are in indigenous non-exporting firms while 56% work for indigenous non-exporting SMEs;

Pay in the SME sector is generally low with no pension coverage and basic redundancy available;

Forfás, the policy advisory agency, said this year: "Overall, in 2011, foreign-owned firms accounted for 89% of exports in the Manufacturing Category, 95% of exports in the Internationally-Traded Services";

Even if fake tax-related services exports and US firm manufacturing prices were not padded for tax purposes, Ireland's indigenous exports would only account for about 20% of the resultant total exports total.

Here's something you probably didn't know: Ireland today is the richest country in the European Union after Luxembourg.

Yes, the country that for hundreds of years was best known for emigration, tragic poets, famines, civil wars and leprechauns today has a per capita GDP higher than that of Germany, France and Britain. How Ireland went from the sick man of Europe to the rich man in less than a generation is an amazing story. It tells you a lot about Europe today: all the innovation is happening on the periphery by those countries embracing globalization in their own ways - Ireland, Britain, Scandinavia and Eastern Europe - while those following the French-German social model are suffering high unemployment and low growth."

This was a fairytale then as the Forbes narrative is now.

Both Ireland and Luxembourg headed the GDP (gross domestic product) data per capita because of statistical quirks: Luxembourg because part of its working population resides beyond its borders and in Ireland's case, because GDP is inflated by the tax strategies and profits of foreign multinationals.

Ireland is not a wealthy country and Eurostat, the EU's statistics office, has produced a metric, Actual Individual Consumption (AIC) per capita, based on the material welfare situation of households, that is a better proxy for wealth in Ireland than GDP (gross domestic product) or GNP (gross national product) per capita, because of distortions caused by the dominant foreign-owned trading sector.

Ireland's AIC ranks with Italy, Spain, Greece and Portugal, below both the EU and Eurozone average. See more here.

Some of the same people who believed a decade ago that Ireland had invented the free lunch lap up misleading reports like the Forbes one as it supports the status quo.

Change comes ever so slowly in Ireland and usually after a dire crisis, if at all.

The massive distortions to data caused by the tax avoidance strategies of American firms in particular, helps to mask the reality and sow confusion overseas while giving comfort to the comfortable at home.

"What crisis?"

Some readers will likely dismiss my views as they may have also during the bubble but how can shortcomings be addressed if they don't appear to exist to fantasists at policy making level and the gullible elsewhere including the mainstream media?

In 2006, a national goal was set that Ireland would be recognised as 'world-class knowledge economy' by 2013 and despite inflation-adjusted spending of €24bn over a decade, the failure to achieve the target was ignored.

Any lessons learned?

Apparently not and the new target is: "Ireland in 2020 is the best country in the world for scientific research excellence and impact" - - this in an economy where the biggest high tech companies such as Apple and Google focus on sales and general administration while Elan, the biggest indigenous success in biotech, is reduced to a shell operation and sold.

Even though the demise of Elan undermined a central plank in the flagship enterprise policy of using university research to establish durable knowledge based industries, had Minister Richard Bruton anything to say? Or for that matter anyone else in the publicly-funded eco system?

In September 2012, Bruton, minister for jobs, enterprise and innovation said: "As I have said before, our industrial policy must not just be aimed at attracting the next Google or Microsoft to Ireland - - we must strive to create the next Google or Microsoft here in Ireland."

This delusion ignores the absence of a significant market and how many Googles or Microsofts has the rest of Europe?

The biggest problem with Irish policy making is that targets are set but evidence is often ignored as are weaknesses.

The most comprehensive assessment of the ease of doing business global is the World Bank's 'Doing Business' series and its 2014 issue gives Ireland a ranking of 15 - - a good level from a total of 189 economies.

In the Global Financial Centres Index, a ranking of financial centres around the world has London on top and Dublin's International financial Services Centre (IFSC) has a rank of 56 in a sample of 80 cities. Dublin had a rank of 15 in March 2007, 13 in September 2008, and 23 in September 2009.

With the exception of the World Bank's 'Doing Business,' the other comparisons reflect the foreign-owned sector in Ireland as the indigenous internationally tradeable sector is small.